Medicare levy surcharge

We may send a letter about the Medicare levy surcharge if the information we receive shows that, for all or part of that year, you and all your dependants (including your spouse):

were not a member of a registered health fund

did not have an appropriate level of private patient hospital cover.

The letter will include a schedule showing the relevant information from your tax return compared with information we hold.

The Medicare levy surcharge is in addition to the Medicare levy. The surcharge rate can be either 1%, 1.25% or 1.5% of your taxable income (including your total reportable fringe benefits).

Since 1 July 2012, the Medicare levy surcharge has been income tested against three new income tier thresholds which are indexed annually. The rate of surcharge you will be charged may increase depending on your income tier.

If you cancelled your health insurance cover while travelling overseas, you may be liable for the Medicare levy surcharge.

Understanding your Medicare levy surcharge schedule

Below is a sample Medicare levy surcharge schedule. Keep in mind that your schedule will contain your own details and may not look exactly like this one.

Sample Medicare levy surcharge schedule

Medicare levy surcharge schedule for year ended 30 June 2017

Tax return information

Your income for Medicare levy surcharge purposes

$192,069

Number of days you or any of your dependants were covered by an appropriate level of private patient hospital cover as shown on your tax return at Label M2

342

Number of days you or any of your dependants were covered by an appropriate level of private patient hospital cover as determined by the ATO. (Note: This may be the same number of days as shown on your tax return if it is only the rate at which you must pay MLS that has changed).

322

Medicare levy surcharge tier

1

Single or family status

Family

Private health insurance fund information

Name of fund

Hospital cover

(Yes/ No)

Policy type

Cover start date

Cover end date

Healthy People Insurance

Yes

Family

01 JUL 2016

07 JUN 2017

The following definitions will help you understand your schedule:

Tax return information – The various amounts declared in your tax return. These amounts are used to calculate the Medicare levy surcharge.

Income for Medicare levy surcharge purposes – Your 'income for Medicare levy surcharge' is used to determine whether you are liable to pay the Medicare levy surcharge.

Number of days you or any of your dependants were covered by an appropriate level of private patient hospital cover – The number of days you may not be liable for the Medicare levy surcharge.

Private health insurance fund information – Provides details of your private health insurance policy, as provided to us by your private health insurer. It includes the name of your fund, the type of cover and the period of cover during the financial year.

We may send you a letter about the Medicare levy surcharge if the information we receive shows that you were not a member of a registered fund or did not have an appropriate level of private patient hospital cover.

Our commitment to you

We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations.

If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.

Some of the information on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.

If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice.